The Following Figure Shows the Budget Constraint of Lesley When

question 108

Multiple Choice

The following figure shows the budget constraint of Lesley when she is faced with two goods: burgers and icecream.

-Refer to the figure above.If the price of a burger doubled,Lesley's new budget constraint ________.

• A) will start from the same point on the vertical axis, but will cross the horizontal axis at 3
• B) will start from the same point on the vertical axis, but will cross the horizontal axis at 12
• C) will start from the same point on the horizontal axis, but will cross the vertical axis at 5
• D) will start from the same point on the horizontal axis, but will cross the vertical axis at 20

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Definitions:

Federal Level

Pertaining to the national government of a country, as opposed to state, local, or municipal levels.

State Level

Refers to governmental and administrative functions that are conducted at a sub-national level, typically involving state or provincial governments within a country.

Temporary Tax Cut

A reduction in taxation rates or an increase in deductions that is implemented for a limited period of time to stimulate economic growth or provide relief during economic downturns.

Aggregate Demand

The holistic demand encompassing all goods and services in an economy, quantified at a set price level over a fixed time frame.